Delta Blues

  • David Harris
  • January 3, 2012
  • News

The Pearl River Delta may have been the very heart of the air freight industry for much of the last decade, but that heartbeat has slowed recently, and on the last day of 2011 was hit by the biggest jolt yet with the grounding of the Jade Cargo fleet.

Jade Cargo International is a joint venture of Shenzhen Airlines (51%), Lufthansa Cargo (25%), and DEG (an investment arm of the German government, 24%). It was formed in 2004 and began operation in 2006 with the delivery of the first of six 747-400ERFs it ordered from Boeing.  It saw its share of turbulence over next four years, with Lufthansa having to inject funds more than once. But when Air China acquired Shenzhen Airlines, things appear to have taken a decided turn for the worse, primarily because the big Chinese carrier seemed to prefer to focus its cargo energy on its Air China Cargo joint venture with Hong Kong-based Cathay Pacific.

Late in 2011 Lufthansa Cargo made it clear that its continued participation in Jade was dependent on investment by its Chinese partner. That investment now appears not to have been forthcoming, and on 31 December Jade grounded all six of its freighters and posted the following announcement on its website: “The temporary suspension of Jade Cargo services is due to overall weak air cargo demand. It will also provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company’s financial structure.”

The question, of course, is “How temporary is ‘temporary’?” Several Asian and European news services have quoted “sources close to the situation” as saying that while Jade is continuing to pay its staff, it cannot afford fuel. Given the falling demand for ex-China air freight, Lufthansa Cargo’s unwillingness to continue without a financial commitment from Air China, and Air China’s apparent lack of interest, the future of the Jade Cargo venture is unclear.

2 thoughts on “Delta Blues

  1. Because the cargo business is slow it would not be a surprise that Air China will fill the gap left by Jade Cargo 

  2. This way to Europe was not enough claer?